Hawaii may be one of only two states that prohibit gambling — even bingo and lotteries — but casino-type video games at several Oahu stores have one longtime lawmaker concerned.

State Rep. Cynthia Thielen, a Windward Republican who strongly opposes gambling, believes several video games at the Tilt store at Windward Mall and Internet Sweepstakes at Kaneohe Pawn may violate state law.

Her opinion is informed in part by a January memorandum from an attorney at the Legislative Reference Bureau that suggests the video games that, depending on the specific facts, “may still be considered a ‘game of chance’ prohibited under Hawaii’s gambling laws.”

“I think it’s worth law enforcement looking into this — to see if quasi-gambling is proliferating to our state,” Thielen said. “If it is actual gambling, which there is an argument that it is, then I think it should be shut down.”

Thielen learned about the games from Kaneohe resident Jim Wolery, who was visiting the Windward Mall one day about two years ago when he passed by the Tilt arcade. What caught his eye was two teenagers pumping cash into a row of machines that to Wolery’s eye resembled Las Vegas slots.

“One of the kids was about 14, and he dropped $40 within about 15 to 20 minutes,” he said. “I said to him, ‘Do you ever win at this thing?’ He said, ‘I’m just learning, but my buddy wins a lot.'”

The buddy, according to Wolery, appeared around 17 years of age. He was told by the older teen that he had won $1,600 several months earlier, but for any win over $600 the store mailed a check rather than make the payout in cash.

“This did not look to me like a wholesome activity,” Wolery said of Tilt. “The machines were very much at the front of the store and the demographic wasn’t old guys — it was the teenage crowd. And this was odd because Hawaii discusses gambling every year or so.”

Wolery was referring to proposals to legalize gambling at the Hawaii Legislature that have always failed.

The owners of Kaneohe Pawn told Civil Beat that Internet Sweepstakes isn’t gambling, while the proprietor of Tilt referred inquiries to a retired attorney who offered the same opinion about that store.

Wolery doesn’t buy it.

“How is that not gambling?” he asks. “I visit the mall often, and other times I would see lounge lizards from Vegas sitting on stools at these things, and I asked them the same question. They say it’s skill as opposed to chance. But the machines will take $100 bills. It’s like what the courts say about pornography — you know it when you see it. I doubt any players are there to enhance their skills.”

Internet Cafés

Tilt and Internet Sweepstakes are not the only places offering casino-type video games on Oahu, and some have operated a long time without much fuss.

As recently as May, a KHON reporter visited Winner’z Zone on Ward Avenue — “one of the latest sweepstakes arcades on Oahu offering customers a chance to win cash prizes up to $5,000, no purchase necessary.”

An attorney for Winner’z, Matthew Matsunaga, said Hawaii’s gambling laws didn’t apply.

“In Hawaii there’s three requirements in order for a game to be illegal,” according to the KHON report. “Those three requirements are: you have to pay money, there’s a game of chance, and there’s a payout. And what these games do is they eliminate that first element, there’s no requirement to pay money in order to play.”

The Kaneohe Pawn owners and the former Tilt attorney made similar arguments to Civil Beat.

“That issue came up four to five years ago, and what (Tilt) did, to their credit, they went to a tremendous amount of research that established, to my comfort, that they are not gambling,” said Sherman Hee, a retired attorney who said he represented the Tilt stores locally for decades. “It’s like tic-tac-toe.”

The owners of Kaneohe Pawn, who refused to give their full names, compared Internet Sweepstakes to the Monopoly game that was offered for awhile at McDonald’s — something the Winner’z attorney also told KHON.

Kaneohe Pawn described Internet Sweepstakes as more like an Internet café where, for $5 an hour, users can surf the web. But they can also play black jack and other games, and they can redeem points for cash.

Asked how that didn’t amount to a game of chance, the owners said the games were instead “randomly predetermined.”

Installed at the beginning of the year, Internet Sweepstakes has proved a big draw for Kaneohe Pawn. The owners said Honolulu police have made a few visits.

Chance vs. Skill

When Thielen asked HPD’s Lt. Jonathan Grems about the Tilt operations, she was advised that the Honolulu Prosecutor’s Office said an Ohio case was hindering their ability to look into Tilt. Grems did not return a call for comment.

Thielen also asked the LRB for input on the impact of an Ohio court decision on gaming activities in Hawaii.

“The short answer is that, even if under Ohio’s gambling laws the activity in question has been deemed a game of skill because the outcome of the activity is not determined ‘largely’ by chance, that same activity may still be considered a ‘game of chance’ prohibited under Hawaii’s gambling law,” wrote research attorney Terrence Lee. “This is because Hawaii law requires only that the outcome rely on chance to a ‘material degree,’ which is a lesser degree of chance, for an activity to qualify as gambling.”

Lee cautioned Thielen that the LRB does not offer legal opinion but rather a review of applicable law. He also said he didn’t have enough facts to make a clearer determination.

Hawaii Revised Statues defines “gambling” as the following:

A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.

“Contest of chance” is defined as “any contest, game, gaming, scheme, or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”

So, are the video games gambling or not? Unless the police and prosecutors decide to take the matter to a court to decide, it’s hard to say.

Jim Wolery has his mind made up, though.

“I have no dogs in this fight — I’ve gambled in Vegas — but to me there is just no question that this is gambling,” said Wolery. “I think it is bad policy and ultimately bad for the kids when they find out that laws are available for interpretation as desires might meet. That does not bode well for society.”

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